You need to be able to describe the characteristics of TNCs and the advantages and disadvantages of them to the countries they have their factories in.
Trans-National Corporations (TNCs): a corporation or enterpirse that operates in more than one country
Multiplier effect: where initial investment and jobs lead to a knock-on effect, creating further jobs and providing money to generate services
Leakage: where profits made by the company are taken out of the country to the country of origin and so do not benefit the host country
The characteristics of TNCs: · Transnational Corporations (TNCs) are large wealthy corporations · They are companies that have their headquarters in one country · They often have factories and other branches spread all over the world · Most TNCs have their headquarters in richer areas of the world · Research and Development usually takes place in the richer country · Production of goods usually takes place in poorer areas
The advantages of TNCs
· Can develop mineral wealth and improve energy production · TNCs can invest in big projects like dams to provide HEP · The money earned by local people goes into the local economy – multiplier effect · Local peoples education and skills can be improved · Local infrastructure such as road and airports can be improved
The disadvantages of TNCs
· Local people may be paid low wages · Few of the managers are local people · Most of the profits go abroad – Leakage · They can cause pollution – air and water due to lower regulation · Most of the minerals extracted are exported · TNCs might pull out with little warning – recession · Poor working conditions – long hours with little time for breaks · Safety can be compromised where laws are less stringent and workers’ health can be jeopardised
Toyota Factfile
Toyota was set up in 1937
Its headquarters are in Tokyo, Japan
It has 250,000 workers employed in 26 countries
It has factories inRussia, India, South Africa, Brazill and Mexico
You need to be able to describe the characteristics of TNCs and the advantages and disadvantages of them to the countries they have their factories in.
The characteristics of TNCs:
· Transnational Corporations (TNCs) are large wealthy corporations
· They are companies that have their headquarters in one country
· They often have factories and other branches spread all over the world
· Most TNCs have their headquarters in richer areas of the world
· Research and Development usually takes place in the richer country
· Production of goods usually takes place in poorer areas
The advantages of TNCs
· Can develop mineral wealth and improve energy production
· TNCs can invest in big projects like dams to provide HEP
· The money earned by local people goes into the local economy – multiplier effect
· Local peoples education and skills can be improved
· Local infrastructure such as road and airports can be improved
The disadvantages of TNCs
· Local people may be paid low wages
· Few of the managers are local people
· Most of the profits go abroad – Leakage
· They can cause pollution – air and water due to lower regulation
· Most of the minerals extracted are exported
· TNCs might pull out with little warning – recession
· Poor working conditions – long hours with little time for breaks
· Safety can be compromised where laws are less stringent and workers’ health can be jeopardised
Toyota Factfile